Aussie Resort [2000] QBCCMCmr 33 (27 January 2000)

C G YOUNGREFERENCE: 0748-1999

ORDER OF AN ADJUDICATOR

MADE UNDER PART 10 OF CHAPTER 6

BODY CORPORATE AND COMMUNITY MANAGEMENT ACT 1997

Number of Scheme:	8799
Name of Scheme:	Aussie Resort
Address of Scheme:	1917-1921 Gold Coast Highway BURLEIGH HEADS QLD 4220

TAKE NOTICE that pursuant to an application made under the abovementioned Act by Ulrich MACK, as the authorised Letting Agent for the scheme,

C G YOUNGI hereby order that the request for a stay of Order 562-1998 of 10 June 1999, is granted.

I further order that the operation of the order is stayed until such time as the appeal by Ulrich Mack against the order is decided or withdrawn.

I further order that the application for the costs of and incidental to the application, is dismissed.

STATEMENT OF ADJUDICATOR’S REASONS FOR DECISION - REF 0748-1999

“Aussie Resort” CTS 8799

Ulrich Mack, the Letting Agent for the scheme, has appealed Order 562-1998 (“the Order”) issued on 10 June 1999 made in respect of an application by Eileen Dorothy Mitchell. The respondents in the appeal are Mitchell and the Body Corporate for “Aussie Resort” Community Titles Scheme 8799. The appeal is set down for hearing on 6 April 2000 in the Southport District Court.

The appellant has requested the following interim order, quote -

1. That pursuant to section 239 of, a stay be made of the Order of the Adjudicator of 10 June 1999 reference number 562/1998 to have effect until such time as the Appeal in this matter is finally determined by the Southport District Court.

2. The Respondent pay the Applicant’s costs of an incidental to this application.

3. Such further or other order as the Commissioner or Adjudicator thinks fit.

Section 239 of the Body Corporate and Community Management Act 1997 (“the Act”) provides –

Stay of operation of orders and decisions

(1)	The adjudicator or District Court may stay the order appealed against to secure the effectiveness of the appeal.
(2)	A stay –

(a) may be given on conditions the adjudicator or court considers appropriate; and

(b) operates for the period stated by the adjudicator or court; and

(c) may be revoked or amended by –

(i) if given by the adjudicator-the adjudicator or the court; and

(ii) if given by the court-the court.

(3)	The starting of an appeal affects an order of the adjudicator, or the carrying out of an order of the adjudicator, only if the order is stayed.

Section 223(1) of the provides that an adjudicator may make an order that is just and equitable in the circumstances (including a declaratory order) to resolve a dispute, in the context of a community titles scheme, about –

(a) a claimed or anticipated contravention of the Act or the community management statement; or

(b) the exercise of rights or powers, or the performance of duties, under this Act or the community management statement; or

(c) a claimed or anticipated contravention of the terms, or the termination of, or the exercise of rights or powers under the terms of, or the performance of duties under the terms of an engagement contract or an authorisation contract.

An order may require a person to act, or prohibit a person from acting, in a way stated in the order (section 223(2)). An adjudicator’s order may contain ancillary or consequential provisions the adjudicator considers necessary or appropriate (section 230(1)).

Section 239 does not specify that a request for a stay of an order must be in the form of an application for an order, nor does it specify that the adjudicator’s decision to grant or refuse the stay must be by way of order. However, I consider it appropriate that the request should be determined by order to allow the general right of appeal against orders by aggrieved persons to lie, even though section 239(2)(c)(i) provides the alternative means of a dissatisfied party having the adjudicator’s decision revoked or amended by the District Court.

In regard to the request being in the form of an application for an interim order, I presume that the appellant has chosen to seek an interim order as a means of obtaining a relatively prompt decision. Section 225 provides that the grounds for issuing an interim order are that it is necessary because of either the urgency or the nature of the circumstances. The appealed Order, so far as it affects the appellant, requires that the rental cost of the telecommunications land-line be met by appellant commencing from the date of the order. The obligation imposed on the body corporate by the Order involves small amounts of money being reimbursed to a few owners, and only indirectly concerns the appellant as a lot owner contributing to body corporate funds. I do not consider the circumstances involve any urgency, nor does the nature of the circumstances, namely the payment of moneys in the interim period before the appeal is determined, warrant an interim order.

However, these determinations as to the suitability of an interim order are of no great consequence as I consider that the application is in an acceptable form for the purposes of section 239, and that I should make an (ordinary) order to the application. The fact that it is not an interim order is of no relevance.

Before proceeding any further in determining this application, there is an issue that I believe I must address. It concerns an allegation of bias against me in the making of the Order which I regard as having implications for my consideration of this request for a stay of order.

The request application has attached to it a copy of the relevant “Notice of Appeal” lodged by the appellant. Two of the grounds of the appeal read as follows –

The Adjudicator CG Young, should have disqualified himself from this matter as he is a relative of the Applicant’s son-in-law.

There has been a breach of natural justice through apparent bias demonstrated by this relationship.

(my emphasis added)

Also, in a submission by the respondent Eileen Mitchell (the original applicant for the order), there is attached a copy of the “Appellant’s Outline of Argument” which document includes the following paragraphs –

It is a fundamental principle of law that justice should be manifestly and undoubtedly be seen to be done (R v Sussex Justices; Ex Parte McCarthy [1924] 1 KB 256 at 259 per Lord Hewart CJ. In any situation, where a fair-minded person would reasonably apprehend or suspect that a case has been prejudged or decided by a Tribunal or Court, then the bias rule is clearly infringed. (R v Watson; Ex Parte Armstrong [1976] HCA 39; (1976) 136 CLR 248 at 262-3.

In the present situation, the interest of the Adjudicator CG Young, is non pecuiniary. Accordingly, the appropriate standard to be applied, is that there is a reasonable suspicion of bias. The test of reasonableness is concerned solely with the [outward] appearance of bias. (R v Commonwealth Conciliation and Arbitration Commission Ex Parte the Angliss Group (1986) 122 CLR 540.

It is clear, in the present case, that a reasonable person would apprehend that the Adjudicator, who has a friendship connection to the Applicant may be persuaded to determine the Application based on that relationship rather than the evidence presented to him.

Pursuant to section 223(1) of the Body Corporate and Community Management Act 1997 (“the Act”) an Adjudicator is able to “make an order that is just and equitable in the circumstances.” This specifically empowers the Adjudicator to make such orders that it considers reasonable. This power, must be exercised pursuant to the principals of natural justice. In the present situation, the Applicant submits that there has been a breach of natural justice in that the Adjudicator has taken into account an irrelevant consideration in exercising the power. The present irrelevant consideration is the familial or friendship link between the Adjudicator and the Respondent in this appeal.

(my emphasis added)

Although the appellant has not asked that I not deal with his request, or even raised the matter of bias in his request, I consider the mere attachment of the Notice of Appeal to the application has raised the matter such that it would be improper for me not to consider it. If it could be concluded that a reasonable suspicion of bias could be held in regard to the making of Order 562-1998, then I should disqualify myself from determining this request.

The allegation in the Notice of Appeal is that I am a “relative of the Applicant’s son-in-law”. The “applicant” referred to is the applicant for the Order, Eileen Dorothy Mitchell, who is also the first respondent in the appeal.

In the appellant’s Outline of Argument, the allegation has been expanded to “the familial or friendship link between the Adjudicator and the Respondent”. There are two respondents, however as the second respondent is “The Body Corporate for Aussie Resort CTS 8799”, I presume the first respondent Mitchell is the party referred to by the appellant.

There is no friendship between Mitchell and myself and to the best of my knowledge I have never met Mitchell. As to the allegation of a “familial” link with Mitchell, while I had no immediate knowledge of any such relationship, to better address the possibility of a distant one I caused a general clerk of the Commissioner’s Office, Timothy Williams, to contact Mitchell to obtain the full name of her son(s)-in-law. He later informed me that she had advised having no son-in-law with the surname of Young. I have no knowledge of any family relationship with a son-in-law of Mitchell who I understand lives in South Africa.

Mitchell did volunteer to the clerk that she was aware of the appellant’s allegations and believed they were in respect of a fellow resident owner in the scheme, Lorna Graham, who has a son-in-law with the name of John Young.

Lorna Graham has been an applicant in a number of similar applications concerning telecommunications. Because of this similarity, it is possible that the appellant has erred in taking the applicant to the Order as being Graham instead of Mitchell. On this assumption, I shall also address the question of familial and friendship links to Graham.

I have no knowledge of John Young. I have no knowledge of a relation named John Young. I have no knowledge of any relationship with Graham through either John Young or any other person. I also have no friendship with Graham, and have had no personal contact with her apart from a brief encounter in 1997 after giving an address at one of a series of public seminars on the (then) new community titles legislation. Graham was one in a file of owners who, immediately after the seminar, introduced themselves to me. The encounter lasted probably 30 seconds and was limited to an introduction and a comment on the address; I probably met some 300 of the 1800 owners who attended these seminars, in the same manner.

In summary, I have no friendship with either Mitchell or Graham nor, to my knowledge, am I related to any son-in-law of either Mitchell or Graham. The allegations, to my knowledge, are untrue and I assert that no bias entered into my determination of the Order, Order 562-1998.

However, natural justice requires that there must be the appearance of fairness and impartiality. That is, nothing should exist from which a reasonable person might draw an apprehension or suspicion of bias on my part.

This question is, of course, best left to others to determine. However, there are reasons why I believe I need to proceed to determine this request for a stay of the order despite the allegation of bias against me.

Firstly, section 239 (quoted previously) provides that “the adjudicator” (or the District Court) may stay an appealed order. The balance of the section also refers to “the” adjudicator. The question arises whether the section only allows the stay to be given by the adjudicator who made the order appealed, rather than just any adjudicator. In the matter of another appeal concerning an order of an adjudicator under the Act, The Body Corporate of “Westlake Villas” v. Meek and Others, (Unreported) District Court Brisbane Appeal No 2183 of 1998 delivered on 29 January 1999, McGill DCJ considered whether the option in section 242(c) to “refer the order back to the adjudicator” precluded him from referring the matter back to another adjudicator. At page 14 of the judgment he said-

I think that the question is answered by the express terms of s.242(c) by which I may refer the order back to “the adjudicator”. There is no power to order a new adjudication by a different adjudicator. I think therefore that there is no point in my considering whether any course would be appropriate or desirable. I might say that this does seem a curious and unsatisfactory situation; if the question of law involved some issue as to bias on the part of the adjudicator, it is not clear what the court could do about it. It may be that the court would have to decide the matter on the merits itself for the purpose of substituting another order or decision under s.242(b). Perhaps in such a case the appellant would have to apply to the Supreme Court under the Judicial Review Act 1991. It is unnecessary for me to attempt to resolve this difficulty.

If the same reasoning is applied to the use of the term “the adjudicator” in section 239, then the request for the stay of order cannot be determined by any adjudicator other than myself. Accordingly, unless I disqualify myself and refer the appellant to the District Court, no other adjudicator can determine this request. I would have considered that course but for the following reasons.

I think it is proper in the circumstances of the dispute and the Order that a stay of order should be issued. It is the general practice of adjudicators to grant a stay of order unless some serious consequence would possibly occur otherwise. For example, an order may be to prevent the body corporate from entering into a contract and if a stay was given in these circumstances, then the contract could be entered into with serious financial consequences for the body corporate or others.

In this instance, a stay of order will cause no great hardship to Graham and, in any case, should be resolved in a few months by the appeal. I therefore find no reason why the normal course of granting the stay should be departed from in this matter.

Thirdly, as I am determining the application in favour of the appellant, the question of bias is not really an issue.

Lastly, while this reason has no great weight in my decision to proceed, I do not believe that a reasonable person would, in the personal circumstances I have described, have an apprehension or suspicion that I exercised a bias in the making of the Order.

My order is therefore that the stay is granted and that the operation of the Order is stayed until such time as the appeal by Ulrich Mack is decided or withdrawn.

Costs Order

The applicant has also sought an order that the respondent pay the appellant’s costs of an incidental to the application.

The “respondent” to the application is the body corporate. However, from the language of the grounds it seems probable that the applicant is referring to the respondent in the appeal rather than the respondent to the application. There are two respondents to the appeal, however as discussed under the above reasons to the first order sought, it seems probable that the applicant is referring to only the first respondent Mitchell. If I am wrong in this, then the mis-identification of the respondent meant is of no consequence because my decision follows the general practice of adjudicators in refusing all such costs for the reasons that follow.

The reasons given to the first order as to why I consider I should proceed in determining that matter, are the same reasons, with one exception, as to why I consider I should also determine this order concerning costs. The exception is that I have not determined this order in favour of the appellant. However, I consider that the balance of the reasons are sufficient for me to proceed in determining this order also.

The question as to whether the legislation allows a party to an application to seek costs against another was determined by me in an application by the body corporate and the Body Corporate Manager against an owner in Order 457-1998 of 26 March 1999 for “Alexander Apartments”. Both parties sought an order against the owner for costs incurred in responding to three applications the owner had lodged. The decision was that an adjudicator has no power to award such costs and that decision has become general practice for adjudicators. The following are the reasons I expressed in the “Statement of Adjudicator’s Reasons for Decision” to Order 457-1998, which are also relevant to the costs order sought by the appellant in this matter –

“Turning to the questions of costs, clearly the dispute resolution provisions of the Act contain no express provision for an adjudicator to order the costs sought by the applicants. Both applicants submit, however, that the power to order such costs lies within the general power of adjudicators to make ancillary or consequential provisions to an order under section 230(1) which states –

The adjudicator’s order may contain ancillary and consequential provisions the adjudicator considers necessary or appropriate.

To date, the question of costs under the current Act has not been determined by an adjudicator.

The “Dispute Resolution” provisions are set out in Chapter 6 of the Act. The provisions describe the jurisdiction of adjudicators (including specialist adjudicators) and, in Parts 8 to 10, the powers and procedures that attend that jurisdiction. Section 223 (1) imposes the overarching principle in the exercise of adjudicative power, to make orders that are just and equitable in the circumstances to resolve a dispute. It also sets out the types of disputes that may be the subject of an order, for example, the performance of a duty under the Act. A comprehensive, though not exhaustive, listing then follows in sub-section (3) of the types of circumstances that commonly attract an order. Leaving aside the special case of specialist adjudication costs under section 226, the only reference to costs is the specific power under section 227 for an adjudicator to order limited compensation for property damage. There is further power to make ancillary and consequential provisions to an order, as mentioned earlier. At section 231 there is a limitation on adjudicator’s powers to make orders concerning title to land.

The adjudicator’s powers are, therefore, prescribed by the legislation, with no express power to order costs incurred by parties having to address matters raised in an application. The question therefore is whether the overarching power to make just and equitable orders, or the power to make ancillary and consequential provisions to an order, can embrace a costs order.

In the matter of Spicer v. Carmody 48 SR (NSW) 348, at page 350, Jordan CJ said It is settled that “Costs in Courts of Common Law were not by Common Law at all, they were entirely and absolutely creatures of statute: Garnett v. Bradley”, and further at 350 that the provision for costs in legislation may be made either expressly or by necessary implication.

That costs were matters of statute was affirmed in Queensland Fish Board v. Bunney (1979) SR Qld 301 where Connolly J at page 303 said It must be remembered that it is a well established principle that apart from the inherent jurisdiction of the court of chancery (read equity), costs are entirely the creation of statute and there is no common law jurisdiction in tribunals to grant costs. Further at 303 he says the better view would seem to be that the power (to award costs) can be conferred expressly or by necessary implication.

In that matter, the party seeking costs sought to rely on a section of the relevant statute that empowered the Court to make any other order it considers just. In seeking to determine whether the language of the section lent itself to an implication that costs could be awarded, Connolly at 303 said Having regard to the principle however, the power must at least clearly appear. The language of paragraph (e) (see bold type above) does not in terms refer to costs at all and it contains no clear indication of an intention to confer the power. At 304 he also referred to a NSW Full Court matter where it was held there was no power to award costs under a statutory provision which allowed for all such other orders as the circumstances of the case require.

The language of section 223(1) of the Act just and equitable in the circumstances and of section 230(1) ancillary and consequential provisions the adjudicator considers necessary or appropriate, bear a similarity to the language of the statutory provisions addressed in the Queensland Fish Board case. As with those provisions, there is no reference to costs or any indication of an intention to confer the power to award costs, for such a power to be inferred. It is my opinion, therefore, that power to award costs is not implied in either of the two provisions, or in any other provisions in the Act.

Additionally, as the process of adjudication under the Act cannot be regarded as a judicial proceeding, recent decisions tend to confirm the conclusion that no award of costs can be considered under the adjudication process of the Act. In Killen v. Lane (1983) 1 NSWR 171, in the Court of Appeal Moffitt P at 175 said in my view his Honour had no power to make an order for costs and, with respect, erred in concluding that the procedure before him was a judicial proceeding, and further at 180 the making of an order for costs, whatever the content of the costs ordered to be paid, requires that there be a judicial proceeding between the parties who are to be made subject to the order for cost

Apart from the above consideration of the provisions of the current Act, I believe that some examination should also be made of the effect on owners of the transition of the dispute resolution provisions as between the BUGT Act and the current Act.

The scheme of the dispute resolution provisions in the legislation, including the appeal provisions, was founded on a government principle that some services were regarded as a “community service obligation”. That is, government felt that in the interests of both the welfare of the community and natural justice, certain services should be readily accessible to members of the public at nominal or no cost.

The cost of making application for an order to resolve a dispute was $20. The cost of lodging an appeal against an order was $20. Sections 97, 98 and 107 of the BUGT Act provided for informal appeal hearings, relaxed rules of evidence, self representation and, of particular importance, that no award of costs could be made by the appeal tribunal. This meant that a person dissatisfied with an order, and with limited financial means, could appeal an order for a nominal charge and with no fear of incurring any costs in the tribunal process.

Section 78 provided that an order could require a party to the dispute to pay no more than a maximum sum of $1,000 to a specified person. The provision did not specify the grounds on which the sum could be ordered. The generality of the provision could have meant that it encompassed the payment of legal and administrative costs for the preparation of submissions to an application, though in practice that was never ordered and it was almost totally restricted to orders against the body corporate for the reimbursement of amounts expended by owners on repairs that were properly a body corporate responsibility.

Most lot owners, and others with an interest in community title schemes, were aware that court costs on appeal were prohibited. A much fewer number would have been aware of the section 78 provision, though its restricted use meant that it was never a financial threat to owners.

Generally speaking, existing owners over many years have become used to a system of dispute resolution which held no adverse financial consequences for them in being a party (whether applicant, respondent or an interested party) to an application, even should an appeal ensue. Of course there was an avenue of appeal from the tribunal to the Supreme Court, though only on a question of law, which may have involved an owner in costs, but that was only a remote possibility.

Accordingly, because of the relatively cost-free nature of the dispute resolution services that were in place under the previous legislation for over 16 years, I believe that any change in the liability of owners to costs would need to be, if not expressly provided for in the new legislation, clearly indicated as an intention of the legislation. That is, to award costs under the current Act in these historical circumstances, in the absence of an express power, would require a most stringent application of the necessary implication rule which, in my view, the Act fails.”

For the same reasons expressed above, my order is that the application by the appellant for costs against Mitchell is dismissed. Of course the appellant has a right of appeal against this decision under section 237 of the Act.

4.	Such other Order the Commissioner or Adjudicator thinks fit.

The Commissioner has no power under the Act to make orders or to instruct an adjudicator in the making of an order. Accordingly, I will accept this as being solely directed to the relevant adjudicator.

I cannot see that any other order is necessary in the circumstances. The Order has been stayed until such time as the District Court decides the appeal, currently set down for 6 April according to the appellant’s grounds. Also, as already pointed out, the decision against costs can be appealed. Mitchell will be slightly inconvenienced by the stay, however I do not believe any other order is either necessary or could assist the parties.